Ameriquest finalizes $325 million settlement, reports say
|January 23, 2006|
Subprime lender accused of deceiving borrowers
Ameriquest Mortgage Co. has finalized a $325 million settlement of allegations that it deceived borrowers, falsified loan documents and pressured appraisers to overstate home values, the Los Angeles Times reported Saturday.
A task force of 49 states and the District of Columbia plans to announce today that the Orange County-based company and two affiliates -- all specialists in higher-cost mortgages to borrowers unable to qualify for bank loans -- agreed to overhaul their lending practices, the Times reported.
Industry experts told the Times the deal could in effect force rival lenders in the higher-cost loan market to adopt similar standards to avoid legal challenges from both regulators and consumers. These loans have been the fastest-growing segment of the mortgage market and now account for an estimate of approximately 20 percent of all such lending, the Times reported.
Settling the case also is expected to clear the way for Ameriquest's founder, Los Angeles billionaire Roland E. Arnall, to become the U.S. ambassador to the Netherlands, reports said.
The settlement is expected to be disclosed by California Attorney General Bill Lockyer, Iowa Attorney General Tom Miller and others at a Los Angeles news conference Monday, the Times reported.
According to people familiar with the agreement, key provisions will include appointment of an independent monitor to ensure compliance, and new rules forcing loan agents to give better disclosure of mortgage terms to customers throughout the approval process, media reports said.
Under the reported deal, hundreds of thousands of customers could be eligible for refunds.
According to media reports, the reported agreement would also:
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